TVA can't account for tritium expenses

TVA can't account for tritium expenses

TRITIUM TIMELINE

• 1999: The U.S. Department of Energy works out an agreement for the Tennessee Valley Authority to provide tritium for nuclear weapons.

• 2002: The Nuclear Regulatory Commission approves a plan for tritium production at TVA's Sequoyah and Watts Bar nuclear plants.

• 2003: Watts Bar becomes the only commercial reactor in the nation that is producing isotopes for bombs as well as electricity for homes and businesses.

Tennessee Valley Authority ratepayers may have subsidized millions of dollars in tritium production costs for the country's nuclear weapons arsenal.

An audit of the program in which TVA's Watts Bar nuclear power plant makes bomb-triggering material for the U.S. Department of Energy turned up a major lack of data and other shortcomings that leave questions about who is paying.

That could include whether the nation's taxpayers are subsidizing electricity production for ratepayers.

In 2003, TVA's Watts Bar became the first and only commercial reactor in this country that is used for electricity generation and also provides radioactive tritium for weapons.

A summary of the audit by TVA's Office of Inspector General included statements that the power producer had failed to address $9 million in "under-recovered overhead" that an earlier audit had found. The rates negotiated with DOE didn't accurately reflect the anticipated costs of the program. Revenue was misclassified, and the data didn't back up about $22.9 million in expenses.

"We were unable to determine if tritium costs were accurately identified and invoiced or if any negative impacts on plant operation from tritium were reimbursed by DOE due to inadequate documentation," the inspector general's office said in the summary released in May.

TVA nuclear power division officials say the issues occurred with the startup of the complex and unique program and also because of a changeover of accounting systems.

"If there were cases where TVA customers may have been subsidizing the program, there'll be an effort to recover that money," spokesman Ray Golden said. "In cases where we overcharged the Department of Energy, there'll be a trueing up of that as well."

The Office of Inspector General would make only the summary of the January 2000-December 2009 audit available, citing concerns about national security.

"The report really uncovers a lot of deficiencies in terms of the way TVA has been running this program," said Don Safer, chairman of the Tennessee Environmental Council and an opponent of nuclear projects.

"It calls into question what you would call core competencies in terms of managing these reactors and some of these other experimental or pioneering programs that TVA wants to be involved in.

"If TVA does a bad a job on them in terms of accounting - as apparently it has on this tritium - it all could come back to the ratepayer in higher bills."

TVA officials signed a nonbinding "letter of intent" in May with Babcock & Wilcox to build up to six mini-reactors that are still in research and development. TVA would be the first to use them.

They also are looking into the use of nuclear reactor fuel called MOX that the Department of Energy intends to make. The process uses bomb-grade plutonium from dismantled Russian nuclear weapons, another controversial proposal for a commercial reactor.

TVA has an agreement with DOE to allow the two nuclear reactors at its Sequoyah plant, 20 miles from Chattanooga, and a second reactor under construction at Watts Bar, 60 miles from Knoxville, to be used for tritium production as well if the federal government needs it.

"The Department of Energy is turning to TVA to do these questionable missions like tritium production and MOX use," said Tom Clements, Southeastern nuclear campaign coordinator with Friends of the Earth.

"It's really no surprise to me that TVA would allow itself to be exploited by the Department of Energy."

tva promises fix

Terry Johnston, a TVA spokesman, said the utility historically has supported the country's national defense system, and that it's part of the mission of the self-supporting federal corporation.

TVA looks closely into projects and won't undertake one without determining it is of benefit, or at least no cost, to electricity customers. In the case of the tritium project, issues from the audit are being remedied, he said.

TVA has made changes in accounting and hired a person - paid for by DOE - to oversee the tritium program.

The $22.9 million referred to in the audit had been a fixed cost that was charged as an estimate when the program began, he said. Instead, the two federal entities have modified their agreement so the fee is based on documented costs. And the $9 million in corporate overhead was determined to be an inappropriate charge.

TVA's Golden said, "The good news is that now that we have some experience and better accounting software systems and a full-time person on this.

"On a going-forward basis, we should have better accounting treatment of this. It should be more accurate as to what the costs incurred have been and the recovery of those costs."

Tritium is used to enhance the explosive power of nuclear weapons. It also can be found in more common items, such as runway lights. DOE quit making its own in 1988, when it shut down the aging reactors at its Savannah River site in South Carolina.

The department is recycling tritium from nuclear weapons as they're dismantled under an international treaty, but fresh tritium also is needed, DOE officials have said. That's because it decays by about 5 percent a year. The radioactivity has a half-life of about 12 years, meaning half of it dissipates over that time.

Rather than building a costly new reactor, DOE turned to TVA. The process involves placing rods containing lithium into a reactor. They're like the rods filled with uranium pellets that fuel the nuclear reaction, cranking out heat that boils water for steam to generate electricity.

Tritium contamination has been found at many reactors around the country because it's a byproduct of nuclear energy production.

At Watts Bar, where concentrated amounts of tritium are produced, the radioactive material showed up a few years ago in slightly higher levels than expected in the cooling water.

TVA is still researching what is taking place and trying to reduce the amount of tritium getting into the reactor coolant water, Golden said. The federal government is responsible for anything related to the project.

DOE's National Nuclear Security Adminstration is paying an average of about $15 million a year to TVA for its service, Golden said.

Damien LaVera with the NNSA said tritium production "is a complex activity, coupled with the use of a TVA nuclear power reactor."

"In response to this audit, both parties have made adjustments to how reimbursable costs are determined to ensure that NNSA cost reimbursements accurately reflect incremental costs for irradiation services."